Re:Chef Software Raises $40M in Series E Funding
by mbesto on Wednesday September 09, 2015 @07:49PM
(#10195397)
> "raise a huge round because money is cheap" is misleading and founders in these large rounds are actually giving up large amounts of control.
When the money is cheap it means they aren't giving up control relative to when money is expensive. There is a phenomenon in tech VC right now, which is the money is beholden to the tech talent and not the other way around. That's not usually the case, historically speaking. Not to mention, some of these rounds are liquidity events for founders who are looking to cash out personally (i.e. look at Groupon's $800m IPO raise and follow the money).
> My personal opinion is that many companies are showing impressive revenue growth but glossing over core profitability, and these companies will have a tough time fixing that.
I see what you're saying, but don't think it's necessarily true. Branding and network effects are real things. That's why finance is loving tech right now...if you can buy your land grab and then created a castle with a moat over a 5-10 year time period, there are some serious rewards of establishing a new brand with longevity at relatively low risk.
There's going to be a time (soon) where profitability does matter, it's just not now.
When the money is cheap it means they aren't giving up control relative to when money is expensive. There is a phenomenon in tech VC right now, which is the money is beholden to the tech talent and not the other way around. That's not usually the case, historically speaking. Not to mention, some of these rounds are liquidity events for founders who are looking to cash out personally (i.e. look at Groupon's $800m IPO raise and follow the money).
> My personal opinion is that many companies are showing impressive revenue growth but glossing over core profitability, and these companies will have a tough time fixing that.
I see what you're saying, but don't think it's necessarily true. Branding and network effects are real things. That's why finance is loving tech right now...if you can buy your land grab and then created a castle with a moat over a 5-10 year time period, there are some serious rewards of establishing a new brand with longevity at relatively low risk.
There's going to be a time (soon) where profitability does matter, it's just not now.